Has the Financial Fair Play war begun?

Over in Madrid, Cristiano Ronaldo is apparently posturing and preening, whining over Real Madrid’s hesitance in paying him £500,000 a week. Down the road, at the Vicente Calderon Stadium, a financial quandary also threatens to engulf Atletico Madrid. How they would love it if their only fiscal headache was to do with the wage demands of a star player.

Atletico now seem as strong as they have been for some time; Europa League winners last season largely thanks to the goals of their £35 million star striker Radamel Falcao, while with a club icon at the helm in Diego Simeone they battered Chelsea into submission to win the Super Cup earlier this month. They even sit above their prestigious rivals in the early season La Liga running.

But sadly for one of the great agitators of European football all is not well, and it is threatening to get decidedly worse as news of their financial predicament further comes to light – and it’s not just Los Colchoneros who ought to be worried.

Uefa revealed yesterday that prize money for 23 teams involved in 2012/13 UEFA club competitions had been suspended, which European football’s governing body say relates to ‘the status of overdue payables’.

Amongst the biggest names on the list were of course, Atletico Madrid, and alongside them on the sit Sporting Lisbon, Rubin Kazan, Malaga (whose own financial trouble has revealed in recent weeks) and Fenerbahçe.

Not the big boys of European football exactly, but clubs reputable enough to make most sit up and take notice that Financial Fair Play is coming.

The 23 clubs listed will have their prize money for European competitions suspended because of outstanding payments still owed to clubs, employees and tax authorities for things like transfer payments, wages and outstanding tax bills.

Atletico are said to have behind in their payments to Porto for Radamel Falcao, and although they have struck a deal with the Spanish tax authorities to repay their €115 million debt to them, the fact such a sizeable fee is outstanding means they failed to avoid the wrath of UEFA.The size of their overall debt stands at just under €200 million.

While named under the banner of Financial Fair Play these clubs in fact fall foul of pre-existing regulations that UEFA had already put in place – although they have also been included in Financial Fair Pay documentation.

All 23 clubs have until 30 September to update Uefa on their progress in settling the debts, and could in theory face bans and suspensions from European competitions should they fail to meet that deadline, something they can hardly afford given their perilous financial state as it is – although so far UEFA have remained tight-lipped on this possibility.

Although the investigation into the 23 clubs was launched by UEFA Club Financial Control Body and UEFA’s statement references Financial Fair Play regulations, it does appear to be something of red herring in describing the punishment as the first act of FFP - something to give the appearance of action while in fact not entirely relating to the much talked-about legislation.

In fact, the financial regulations that will govern European football will not be fully imposed until the 2013/14 season, although monitoring of club’s accounts has already begun.

Of course the main aspect of Financial Fair Play and the one that will truly worry the big boys of European football, namely but not exclusively Manchester City, Chelsea and Paris Saint-Germain, is the ‘break even’ rule that essentially means clubs can only spend any money they make in profit in order to make them more sustainable. By way of explaining just how big a leap this will be, in the last set of accounts available, City in fact paid more in wages alone than they generated in revenue for the entire year.

It's this rule that is certainly causing a few headaches amongst the hierarchy at some of the biggest clubs in Europe, and indeed some of the 23 named yesterday will also be sweating on their finances when the first batch of sanctions are handed out next season.

But for now, see yesterday’s statement as something of a warning shot that Uefa are serious about Financial Fair Play and are shaping up to act, something that could see some of the biggest clubs on the continent wind up in hot water. The battle in earnest is soon to begin.

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